Videocon insolvency: NCLAT moved over breach of confidentiality issue

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October 01, 2021 5:45 AM

Not happy with the value being realised through the resolution plan, the dissenting creditor had earlier moved the appellate tribunal seeking to set aside the order and remand the matter back to the committee of creditors (CoC) for its re-consideration.

Twin Star’s resolution plan of Rs 2,962.02 crore meant a haircut of over 95% on admitted claims of Rs 64,838.63 crore.

Bank of Maharashtra (BoM) on Thursday raised before the National Company Law Appellate Tribunal (NCLAT) the breach of confidentiality issue in the insolvency resolution process for Videocon Industries, asking how the bid amount can be so close to the liquidation value.

Not happy with the value being realised through the resolution plan, the dissenting creditor had earlier moved the appellate tribunal seeking to set aside the order and remand the matter back to the committee of creditors (CoC) for its re-consideration.

Pleading its case before the two-member NCLAT bench, BoM’s counsel Vikas Singh said, “Here the kind of bid that has come is so close to the liquidation value clearly suggests that the confidentiality has not been maintained. More than 95% proceed is being given to the secured creditors (as per the plan) because of the leak of this (liquidation) value to the bidders.”

Twin Star’s resolution plan of Rs 2,962.02 crore meant a haircut of over 95% on admitted claims of Rs 64,838.63 crore.

In December, the committee of creditors had approved Twin Star’s resolution plan with 95.09% of the creditors voting in favour.

While approving in June this year Twin Star’s bid for Videocon Industries, in which the lenders agreed to take a 95.85% hair-cut, the NCLT had also raised the breach of confidentiality issue and asked the Insolvency and Bankruptcy Board of India (IBBI), to see whether confidentiality was maintained during the corporate insolvency resolution process, as Twin Star’s bid was very close to the liquidation value.

The NCLAT will continue hearing the matter on Friday.

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